Canadian Tire REIT Raises C$263.5 Million in Toronto IPO

Oct. 10 (Bloomberg) -- Canadian Tire Corp.’s real estate
investment trust raised C$263.5 million ($253 million) in an
initial public offering, according to two people familiar with
the transaction.

CT Real Estate Investment Trust, created by the country’s
largest sporting goods retailer, sold 26.35 million trust units
for C$10 each, with an initial yield of 6.5 percent, said the
people, who asked not to be identified because the terms aren’t
public.

Canadian Tire created the REIT to spin off about 72 percent
of its real estate portfolio, the Toronto-based company said in
a Sept. 24 presentation filed with Canadian regulators. The REIT
will acquire 256 commercial properties totaling 19 million
square feet after its IPO closes the week of Oct. 21, the
company said.

Canadian Tire, a 91-year-old company that also owns
clothier Mark’s Work Warehouse, PartSource and sports chains
Sport Chek and Sports Experts, will hold 85 percent of the REIT
after the sale closes, the documents show. Royal Bank of Canada
and Canadian Imperial Bank of Commerce led the sale.

REITs, which receive preferential tax treatment from the
government, are companies that invest in income-producing real
estate and pay out most of their income to investors through
monthly cash distributions. Robert Nicol, a Canadian Tire
spokesman, declined to comment.

Canadian Tire is following Brampton, Ontario-based Loblaw
in selling property to unlock value from their stores in
Canada’s largest cities. Loblaw’s Choice Properties raised C$400
million in June in Canada’s largest REIT IPO. Hudson’s Bay Co.,
Canada’s oldest department store chain, also said it’s
considering a REIT after it completes a $2.4 billion takeover of
New York-based luxury retailer Saks Inc.

CT REIT will trade on the Toronto Stock Exchange under the
symbol CRT-U.